Brent Could Drop to $85 as US-Iran Settlement Revives Fed Cut Bets

6 articles · Updated · robinjbrooks.substack.com · May 25

$100 front-month Brent could fall to about $85 quickly if Washington and Tehran reach a credible peace deal, according to the analyst, as markets front-run a reopening of Strait of Hormuz traffic.
That oil drop would ease inflation fears and reverse the war-driven shift in rates markets, which had priced out cuts and recently began leaning toward Fed hikes.
The analyst says the dollar would then weaken as US rate expectations move back toward pre-war levels, with the biggest downside seen against emerging-market currencies through the rest of 2026.
The call assumes the conflict leaves limited lasting damage, though weaker fiscal space means long-term yields may not fully retrace even if the broader pre-war market playbook returns.

The market expects a peace-driven price drop, but will deeper global inflation trends defy this long-awaited market reversal?

Peace with Iran may lower oil prices, but could AI's massive energy demand ignite a new inflation crisis?